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CHRISTINE ROMANS, CNN HOST (voice over): 2009, the year of the financial hangover. A toxic cocktail of rising unemployment and falling home prices left us in a world of economic hurt. Wall Street is feeling OK, but only because they took their medicine early in the year. In the form of a bailout and stimulus elixir brewed up by the federal government. The bill went to the taxpayers, and we'll be paying it for years to come.

So what about this year? Are good times just around the corner? What will the New Year bring for your job, your home, your savings and your debt? Bring out the crystal ball it's time to talk YOUR MONEY in 2010.

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ALI VELSHI, CNN HOST: Ok. So where do we go from here? Hello everyone. Welcome to a special edition of YOUR MONEY 2010 predictions. I'm Ali Velshi.

ROMANS: And I'm Christine Romans. It was the year of the financial hangover, the year of the layoff. 2009 saw the highest unemployment rate at a quarter century, now while the pace of job cutbacks has slowdown we're still far off pre-recession levels. Look at this. Since the recession started we've gone from 4.9 percent unemployment all the way to 10 percent.

VELSHI: Now the question is where is unemployment headed this year? We asked our guests to bring their crystal balls. I see none of them with a crystal ball. Chrystia Freeland is the managing editor of the "Financial Times." Joanne Lipman is the former editor and chief of Conte Nast portfolio also joining us, our good friend and author Joe Queenan. All of you welcome back to the show.

Let's talk about what this is going to do. First of all let's talk about the politics of it. Is this economy where we are right now and what's happening right now going to help or hurt the Democrats, because we've got elections in 2010.

Chrystia lets start with you.

CHRYSTIA FREELAND, U.S. MANAGING EDITOR, "FINANCIAL TIMES:" It's going to hurt them. Economy is weak. And I think that chart that you showed was really, really telling. You know from 4.9 percent to 10 percent is a big drop and it's going to take a lot to go back up. People are still going to be feeling the pain.

ROMANS: Joanne.

JOANNE LIPMAN, FMR. EDITOR IN CHIEF, CONTE NAST PORTFOLIO: It is all about jobs as you pointed out. Jobs, jobs, jobs. As long as unemployment is there then we're going to have a lot of disaffection among voters and not only that, another really important issue that's going to come up in 2010 is going to be the foreclosure rate. Right?

You've got something like 14 percent of people who are already behind in their mortgages or in foreclosure. When people start seeing that their neighbors are being turned out of their homes or losing their homes, that's going to become a real political issue.

VELSHI: And those two are tied, obviously. The more people who lose their jobs the more homes get foreclosed. Joe.

JOE QUEENAN, AUTHOR, "CLOSING TIME:" Unemployment goes down slightly. The Democrats do get hurt in 2010 but Obama doesn't care about 2010. He cares about 2012. The classic political role as you take your recession in your first year. The second year you start to come out. The third year you're out, the fourth year the economy's booming and you get re-elected. That's a cynical way to look at it, but that's the history of the United States.

ROMANS: One thing about jobs that I think is so interesting, the end of 2009, is that you are starting to see temporary hiring. Which is something that the CEO of a deco came by and says that's the first place you going to look for some kind of glimmer of hope? You are starting to see 36 states in November actually saw their unemployment rates drop. I mean look no one's getting a job tomorrow but at least the blood-letting is over. So that is something ...

FREELAND: That temporary hiring though it seems to be converting to full time jobs more slowly than in past recessions. Part of what I think we're seeing right now is a two-speed recovery. Businesses are recovering more quickly than households. Companies are starting to do really well. Partly because they're so efficient.

VELSHI: We've been hearing that, but what's happening is it's weighing down on the president's ability to get things done because it's weighing down on this popularity. Let's take a look at the poll of polls which takes a look at the president's overall rating. Back in early November, his favorable were 53 percent. His performance rating, his approval rating was 53 percent. By mid-November it dropped to 48 percent. Now this is interesting.

Early December, up a little bit. And now up a little bit. Look, these are very small numbers to be comparing, but the bottom line, Joanne is that the president's ability to get things done does to a great degree depend on at least half of people in this country supporting what he does.

LIPMAN: That is absolutely right. We're going to see those numbers erode further I would think, because unemployment figures can actually go up before they go down. Everything is arraying in exactly the wrong direction for the president as we head towards those mid- term elections. For the first time we are starting to hear people actually compare this year to perhaps 1994. Which is a frightening thought, 1994 when Clinton lost control of the House.

And so you know, if things continue in that direction, the president's ability to carry through on his ambitious agenda is hurt that much the more. It's going to be so much more difficult for him to achieve what he wants.

ROMANS: Since you brought up history, we will go back and look at George W. Bush, 2001's approval rating, 86 percent.

VELSHI: Around the same time. Clinton '93, his approval rating 54 percent, George H.W. Bush in '89, his approval rating was 71 percent, Reagan, back in '81, an approval rating of 49 percent. These are all Gallup Polls I think. CNN/USA Today Gallup Polls, It's got to be causing some, some hand wringing in the White House.

QUEENAN: The only one that's relevant. Because with George Bush ...

VELSHI: Reagan number opinion 49 percent.

QUEENAN: Yes. Because he is dealing with, he's dealing with the fallout from the Carter years. You have 18 1/2 percent interest rates. So that's a relevant number. Clinton's number is completely irrelevant. Because he had inherited George Bush's bull market, so the economy's booming. The George Bush number is completely irrelevant because of 9/11. None of those numbers are even vaguely comparable.

The only number that would be comparable would be Herbert Hoover because that is what Obama's dealing with. Obama has been dealt one of the worst hands in the history of the country. So you go back and look at Abraham Lincoln's approval ratings which were terribly low and that's what's relevant. The other things are, those number are completely irrelevant.

ROMANS: So what he has been dealt now, he has to partner with Wall Street, right, and the American banking system to try to get it out.

VELSHI: I have got to say some of that partnering or at least talk of partnering of Wall Street is not going to be good for his numbers.

ROMANS: It is not going so hot.

FREELAND: Is fat cats better for his numbers.

ROMANS: I'm not sure. But speaking of fat cats OK, this is a roman numerals 13,780 thousand, this is the average 2008 pay of the banks who received the bailout money. That's 2008, now 2009 we're hearing some giving up a bonus, some of them are restructuring, some of them are not going to allow cash compensation for the highest paid people. Does America, I guess and the White House, is their relationship with the banking industry getting better Chrystia in 2010?

FREELAND: Couldn't get worse. But, no I do think that a new element has entered American politics, which hasn't really been there arguably since the great depression which is this real populist rage at Wall Street that hasn't been there for a really long time. America was different from; say, Europe, with, because ordinary people were quite happy for rich people to be really rich. A sense of ...

VELSHI: A fact you might join into those ranks.

FREELAND: And I think that has changed because there's a sense now that particularly when it comes to Wall Street these are, this is unfair compensation, and that it's a one-way bet. You win in good times. When bad times come the taxpayer bails you out.

VELSHI: I share Joanne's view that jobs are the single biggest issue. I also feel that if our Unemployment rate were 4.9 percent as opposed to 10 percent we wouldn't care about the fat cats as much.

LIPMAN: Totally agree, Ali. Absolutely, I mean this is the one way that banks can get out of the dog house. Which is if our economy improves at such a rapid clip no one will care. That issue will completely recede if all boats are lifted and everyone feels like they're doing well again.

ROMANS: The bankers this year are like the drug company CEOs four or five years ago and everyone was complaining about high drug prices. I mean this really serious.

ROMANS: In uncertain times ...

QUEENAN: When they didn't show up because they said it snowed, when they didn't show up they insulted the American people. Obama should say I'm inviting you back down and I'm going to send a cab for each of you. They can ...

ROMANS: He was gracious.

QUEENAN: He was a gracious guy. But you know what he will get them in the end. What I find weird about this, though, is the idea of; I never thought I would live to see a time in the United States where the Republicans are attacking the fat cat bankers. It's like the revolt -- the roles have been completely reversed. I must say, it rings a bit hollow. I must say it does ring a bit hollow when Republicans attack the bankers. It does.

LIPMAN: I just think it's been surprising how ten ears of bankers have been.

VELSHI: That is fascinating.

LIPMAN: That is fascinating, yes. And they are very, very smart guys.

VELSHI: They are busy doing god's work. Don't be too hard. FREEMAN: And I think that there is a calculation, actually, in some of the Wall Street firms that it actually doesn't matter. We're making money. Our shareholders are happy. We're going to ride this out.

ROMANS: To not get it, the people are ...

FREEMAN: It could be both. You know, no one elects them and I think they figure, that ride through.

VELSHI: When we come back, we have to take a break, when we come back we are going to talk about what that might get them. What that arrogance might get them and some other things that are happening. 2009 is, well, it likely ended better than it started, for your investments. I hope it did. What's 2010 going to bring? Grab a pen and paper. You and your portfolio will not want to miss this.

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VELSHI: Last March we hit rock bottom on the Dow but since then it has been a pretty steady upward trend and if you invested in gold in early 2009. Wow, doing well by the end of the year.

ROMANS: At the same time a tough year for the American dollar and China's economic growth is challenging Americans dominance. What does it all mean for next year? Stephen Leeb is the author of "Gain Over" and Diane Swonk is chief economist at Mesirow Financial.

Let's start with gold here and we'll bring in Stephen Leeb because we love to talk to him about gold. It has been quite a ride year. Even as you saw a decade that was horrible for stock investors you see gold doing very, very well. Does this last?

STEPHEN LEEB, AUTHOR, "GAME OVER:" I think it does. I mean, you know, if you compare it to the 1970s-'80 when gold hit $800 at the beginning of 1980 that marked the end of something. Paul Volker had taken control of the economy and he had vowed that he's going to kill inflation no matter what happens. Now no one's taking control. We just have this massive flood of money. Not only from America, but from Europe, from all the developing countries, and gold has a 5,000-year history of being a stored value.

I know it doesn't have industreal uses but it didn't have industreal uses when it was trading at $250. And one other quick point, it's not just a short-term thing, gold. Between 1971 and today, if you look at gold versus the S&P 500, guess what? They're almost the same, including dividends.

Gold is actually outperformed liquidity. I don't want to sound like a gold bug. Let me just end this by saying I hope I'm dead wrong, but when I look at the flooding of currencies in these developing countries, you have to own some gold, the bull market is likely to continue.

VELSHI: Diane what is your prediction on gold? DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: I stay away from gold. It doesn't have industreal use. I do know it makes nice wedding rings, which I've had a few of. Holding on to the last one a nice Christmas present. But it is just not something that I can buy. You know, as an investment, because I don't understand its investment value.

That, many people have made money in it. Many people have made money on a lot of false profits as well. I'm not as much into gold. I think inflation, if you're concerned about inflation, you should be buying tips. That has been a very good market over the last year. I don't think inflation is a near-term problem but I do think it is a five to ten-year phenomenal.

So far all that money that Ben dropped from helicopters is stuck in the top of trees and we can't reach it yet till it falls to the ground, we don't have to worry about inflation. When it does fall to the ground, we do have to worry about inflation.

ROMANS: And so Tips, treasury inflation protective security, that is the aurum there.

VELSHI: The bonds you buy, that return changes based on inflation.

ROMANS: And I will say that on the gold thing, just from a personal note, my husband just lost his wedding ring. I said, come on honey can you do it when precious metals aren't at a record high? Really, really. Let's see what's going to happen.

VELSHI: Diane if you are worried about inflation how does that work into concerns about the dollar and what do you do about it as an investor?

SWONK: You know I think it is really tough. The dollar has changed its correlations quite a bit over the last year. We've seen all kinds of movements in the dollar. The dollar appreciated 21 percent during the height of the crises, and then depreciated over ever the last year. So any time we get any kind of scares out there like Greece, or Ireland or Dubai, we get a rally in the dollar.

So I think it's very hard to play as a currency right now given the high level of uncertainty out there. I'd be very careful on that, although I do think the trend will be downward on the dollar. It's still a reserve currency.

Having that status has given us enormous privileges in the world. We may be whittling away at it by not thinking enough about the deficit. But for the moment that uncertainty on the rest of the world is to our advantage. It is a dangerous play, over the course of the year. You could easily get pops in the dollar as uncertainty creeps up because we're not through the entire crisis as you said and the after shocks of the storm that hit us.

ROMANS: And we are showing you the value of the dollar versus one euro, the European currency but it is also the dollar index and a lot of other gauges of people look at to show this period of dollar weakness, some say the dollar weakness is simply because the dollar, now that the, the crisis is over ...

VELSHI: There are other things to invest in.

ROMANS: There are other things to invest in.

SWONK: Exactly. Exactly. And there was better interest rates abroad than in the U.S. And as the U.S. comes back and the rest of the world starts to become a little weaker you could see some reversal there. I'm not predicting a major reversal in the dollar, but I think the risk is high enough that I wouldn't want to be making a bet on currencies. I'd bet on fundamentals, I would be betting on export related companies in the U.S.

LEEB: I think I take a different perspective. I think if you look at how the dollar performed. You just can't say blanketedly it was up or down. I mean, the strong currencies last were the Brazilian real and the Australian dollar. What do they have in common? They're both resource-rich countries. The dollar was somewhere near the bottom, but it did outperform other currencies.

It was about even with the Indian rupee, which is not a resource- rich country, and if you see, you know, Brazil real you see Australian dollar, you see gold in there, you see the Canadian dollar and you see our dollar. We're not a resource-rich country, and I really think that that is what's calling the shots now. Resource richness or how independent you are in terms of resources.

ROMANS: Right. Diane, let me ask you about stocks. Because most people watching us are not going to investing frankly in currencies. Lets be honest, they are going to be looking at their 401(k) and their own exposure to the stock market. We know that the last ten years have been the worst years for stock investors in some 200 years. If you're in your 30s or you are in the end of your working career, this has been ...

VELSHI: Has been a bad decade for you.

ROMANS: It has been a horrible decade.

SWONK: No one's retiring.

ROMANS: Is next year better for stock investors and for the stock portion of their portfolio?

SWONK: Well we had a huge run-up from the lows that we saw. I think we've gotten a little heady recently but overall, stocks are still going to be very good in the next year and year-end comparisons frankly very good. So I think we'll still see some upward momentum in stock but it's time to be choosing.

I'm very much into fundamentals. Play the dollar via exports, there is no way to get out of this situation except for exporting aggressively. And that is your equipment producers, your old line, some of them Midwest manufacturing industries; also I'm big into tech. We are on a precipice of a new technology revolution. I think that is something very important right now. I never ever bet tech in the 1990s. I didn't understand the dotcom movement, didn't have fundamentals, the move from the information to the knowledge age. Smart technologies those cameras that take our pictures and get a license plates and get those tickets out there, and pay for themselves, those are the way of the future and they are happening very quickly. A lot of technology is going to be moving very much next year.

LEEB: Unfortunately, those same cameras that Diane is talking about, I agree with her proliferation, but they also require natural resources namely silver. And there's going to be precious little silver in the world. Every time you build a gigabyte of solar energy it requires maybe 50 to 80 tons of silver. I don't think we have enough, and I think that's one reason the economy and the market are going to struggle next year.

I mean oil right now is up 100 percent from its lows. We've never had that kind of move in oil, at least since 1973, without their being some pressure on the stock market, some pressure on the economy. So I don't see a big up move in the stock market, but at the same time, coming back to what Diane said, helicopter bend, and will continue to flood this economy with money. And that should keep the market in a trading range, but I think with that trading range, I expect commodities and matereals to really be the leaders.

ROMANS: Talking about ...

VELSHI: Can you do by the way in stocks, it is useful to know, that while you're right, most people aren't going to buy currencies you can invest in stocks and take advantage of currency increases.

ROMANS: And commodities.

VELSHI: Commodities increases.

LEEB: And for example, you can buy EPS on both Brazil and Australia.

VELSHI: Right.

ROMANS: Stephen Leeb, "Game Over," you are referring to Ben Bernanke. Helicopter Ben Bernanke the Fed chief. Famous said if we run out of money I'll just drop it out of a helicopter.

LEEB: And they will.

SWONK: And no defense against deflation, by the way. The comment was not meant to fuel bubbles it was meant to defend the economy against a false reading.

VELSHI: Well from Wall Street to the your street and your wallet, the best places to invest your money in 2010. That's next.

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VELSHI: With the stock market up, way up, since it's low last March, is now the time to buy or to sell or to hold? And one of the best investments you could make in 2010. Here to help us navigate the market our good friends Ryan Mack, he is the president of Optimum Capital Management and Doug Flynn certified financial planner and founder of Flynn, Zito Capital Management.

Gentlemen, you've both been with us through this entire financial crises, through the recession and now into the recovery. Some people were really smart they were well invested. You might have been so lucky that you first bought stocks on March 9, 2009, right at the bottom and you've ridden it all way up. Most people are not that lucky. They're either still carrying a big loss from the highs of the market in 2007, or they're not invested. Doug what do you do now?

DOUG FLYNN, PRESIDENT, FOUNDER, FLYNN, ZITO CAPITAL MANAGEMENT: You should have been adding all along is what you do, but when you look at where we are now in terms of after the fallout from Lehman, I think you're really going to get the market back on a sounder footing almost racing that huge blip downward and back up.

What that means is you take away that extreme, the world is coming to an end and those dire predictions and you get back on OK we have a recession, we are working our way out of it. There is a lot of opportunities, the market's going to get back to some solid footing higher than it is now with good long-term insurance.

VELSHI: OK. Let's talk about a one-year, a five-year and a ten- year time horizon. What should you be doing?

FLYNN: Yes, if it is a one-year horizon you really can't be involved in the market to anything to speak of. You have to be in money markets or really ultra short-term bonds at most. Once you start getting into five years you can bring in some stocks, some bonds, and you want to have the alternative space. Alternatives we mean commodities you are talking gold, oil, all of those things in that space. But it is a mixture of stocks and bonds and commodities.

And ten years or longer we always say you want to have as much in equities as you can sleep at night comfortably with and then a quarter of the difference in alternatives and commodities and things like that. But much less in bonds for a ten-year time horizon or longer.

VELSHI: I know you both share a view that for the investor who doesn't think of themselves as highly sophisticated. Your stock investment really you should think of as mutual funds generally speaking, while we are talking about buying stocks if somebody doesn't know how to buy stocks, you are talking about mutual funds, in fact you have a recommendation of a mutual fund for 2010.

RYAN MACK, PRESIDENT, OPTIUMUM CAPITAL MANAGEMENT: T. Rowe Price Equity and again I love mutual funds because they give you access to broad diversification. The T. Rowe Price mutual fund has a $2,500 minimum investment however Brian Rogers has been there since 1985, a very well respected name in the industry. They have high yield, yield solid returns, and while curbing risk and really remaining very diverse.

So most of their holdings have no more than 4 percent equity rating, where most of them have about a 1 percent rating. So for that individual investor that wants to be a little bit more conservative, they want target some very diversified funds as well high dividend yield in stocks rate companies as well, then that is a great deal.

VELSHI: Both of you do have some clients who would like to buy stocks and you're not scared of the markets. If somebody really does want to buy a particular stock, do your research and know whether you're in the right position to buy it, but you actually have an interesting tip for 2010.

MACK: Yes. Well Rogers Communications. I went over to Canada for this one. This is a great company. At the end of the day, the diversified communications and Media Company located in Canada. As far as their industries, about two years behind U.S. industry, 90 percent the cell phone penetration, is about 90 percent in the U.S. versus 70 percent in Canada.

VELSHI: So there is room for growth.

MACK: So there is a lot of room for growth. A little slipup in terms of additional subscriber based lately, but they do have a lot of room for additional growth in that area. Wireless ability, superior cable ability. I think it is a great fund and a 4 percent yield on top of it. Not going to get phenomenal returns from this stock but going to get that 4 percent yield on top of that, it should be a great company.

FLYNN: You know what I like about what Ryan is saying, he is talking about large caps, he is talking about more established names, he is talking about some international companies, Canada is international from the U.S. But those kind of themes are very important as we move on it's going to be more of that and the dividend yield and all those things that people look for I think is part of the foundation of what you want to do with the core part of the portfolio.

VELSHI: All right. So you are both saying that for investors, our viewers, 2010 is going to about a year of opportunity. A little bit of homework will help you figure what's going on. Ryan great to see you as always. Doug thanks so much.

Christine.

ROMANS: Starting this year no matter what your income level you can convert that IRA into a Roth IRA So is converting in 2010 the right choice for you? Joining us now is Walter Updegrade senior editor at "Money" Magazine and guru of all things retirement. First of all what's the difference between a traditional IRA and a Roth IRA?

WALTER UPDEGRADE, SENIOR EDITOR, "MONEY" MAGAZINE: With a traditional IRA you have pre-tax dollars in there, when you pull that money out it is taxed. With a Roth IRA you're contributing after tax dollars money you've already paid tax on, but when you pull the money out, the money isn't taxed. Your contributions isn't taxed nor are all the earnings taxed.

ROMANS: So there are some people who are eyeing changing their traditional IRA converting it into a Roth IRA new rules are going to allow people for who that is appropriate to do that?

UPDEGRADE: Right. Exactly, up until now if you're modified adjusted gross income was greater than $100,000 you weren't allowed to convert a traditional to a Roth. But starting in 2010, that restriction is going to be eliminated. You can convert regardless of income.

ROMANS: Who is this appropriate for?

UPDEGRADE: Generally speaking, if you think you're going to be in the same or a higher tax bracket, when you pull the money out of the converted Roth IRA compared to what your tax rate, when you do the conversion, it's a better deal to do the Roth conversion. It's also, can be a good idea if you're, want to leave a tax-free legacy to your heirs because once the money is in the Roth account, it's not going to be taxed.

And another good thing is what I like to call tax diversification. If you convert just some of the money into a Roth, you can have a pot of money that is in a traditional IRA that money will be taxed. Then you will have some money in a Roth IRA that won't be taxed. Maybe you will have some in a taxable account that is going to be taxed in the long-term capital gains rate. So in effect you're diversifying your tax exposure much like you diversify with stocks and bonds.

ROMANS: All right. Walter Updegrade, senior editor, "Money" Magazine. Thank you so much for breaking it down for us.

And next, the housing market. It's been all over the map in 2009. Conflicting reports every month about the health of this sector. Will the value of your home rise or fall in 2010?

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ROMANS: What a year in real estate. One week you see home sales perking up a little bit and then there is new data showing new construction is down. Foreclosures plague hundreds of thousands of homeowners each month.

VELSHI: But then there have been low interest rates and this first-time home buyer's credits that have helped people get into the housing market. Let's look at some of last year's numbers. Home prices were down as of October down 6.8 percent from a year earlier. But check out home sales, so these are prices, now you are looking at sales. Hard to distinguish that line but it's actually up 21.4 percent from the previous October.

ROMANS: Yes, but the previous October was a flat line. Right.

What can we expect for housing this year? Chris Mayer is the professor of real estate at Columbia Business School. He joins us now. Thank you so much for joining us.

VELSHI: That doesn't like Columbia. Just saying.

ROMANS: Yes, it doesn't at all. But listen let me ask you ...

VELSHI: Neither here nor there.

ROMANS: Let me ask you if the value of our biggest asset, our home if you are a current homeowner, does the value of your asset get better next year and is it any easier to sell a house next year in 2010?

CHRIS MAYER, COLUMBIA BUSINESS SCHOOL: I think it's probably going to be a little easier than it was this year. I wouldn't expect you know, a v-shaped recovery in terms of home prices going up a lot, but I think in selected markets, we're certainly starting to see things stabilize. I'm out in California, and this is sorts of one of those places where I think there are really, there are signs of stabilities and, you know, occasional pockets where prices are, you know, ticking up a little bit.

ROMANS: Occasional pockets? That doesn't sound like a bull market.

VELSHI: It does strike me, Chris; I've been saying this for a while. Depending on where you live, if you live in -- let's just actually eliminate the pockets that are going to be really bad. For the rest of us, these 5 percentish mortgage rates indicate that if you're the average American who takes a mortgage for 15 or 30 years this might be a very good time to buy. Do you agree with that statement?

MAYER: Absolutely, I completely agree with you Ali. I think this is a wonderful time to buy a home to lock in prices whether we're at the bottom or whether they're going to fall a little bit further. You're going to lock in a mortgage rate that is very close to 60-year lows.

VELSHI: Yes.

MAYER: And you know, that mortgage rate stays with you no matter what. I think if you ...

ROMANS: Does that mortgage rate go up next year? I mean is this kind of a nice window of low mortgage rates? Do you think those mortgage rates are going to rise eventually?

MAYER: I think there certainly some risk. The Federal Reserve has announced that in the first quarter of next year it is going to stop buying mortgage backed securities. It took on 1.25 trillion of those. Helicopter Ben is not going to be dropping quite as much of the goodies in terms of growth rate. VELSHI: A massive effect. The day they decided to put a lot of money in is when mortgage rates went down so that could happen. I don't know if it will have the same effect but it could actually cause mortgage rates to increase.

MAYER: I think the estimates are sort of modest increases about a another half percent higher, but you know, if the ten-year treasury goes up, if we see -- if we see any signs of inflation, or there are issues of the dollar or other things, I think the risk on mortgage rates is almost all lopsided risk. It's very hard to imagine rates are going to be much lower. They certainly could be, you know, half a percent or a percent higher.

VELSHI: Right.

MAYER: A year from now.

VELSHI: Which for your long-term calculations, and a lot of calculators on the line where you can do those calculations. I would say that it's not the reason to run out and buy a house right now. It's the reason to re discuss it with your family if you're thinking about it.

ROMANS: Yes, you are absolutely right. Christopher Mayer maybe it means also that people who have been desperately trying to sell their home, move for a new job. Be able to do it. Chris at Columbus Business School, of course he is in Irvine, California.

VELSHI: All right. Coming up next where well prices are headed in 2010, and what that means for you at the pump.

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VELSHI: Next on our list of predictions for 2010, oil and gas prices. To better understand where prices may go we have to look back at where they've been. Oil hit a record high about a year and a half ago on July 3, 2008, just about $145 a barrel. That coincided with the economy starting to slow down. You can see oil went down by about February of 2009 to the low that we've had in the last year, $33.98.

Now over the course of the year, oil prices gained hovering around the $70 a barrel mark by about the end of 2009. The question is, where will the economy go in 2010? What effect is that going to have on oil prices and the price that you pay at the pump? Christine.

ROMANS: Hmm. We're going to peer into that barrel of crude and see where it's going to go. Right Christopher Steiner is author of "$20 Per Gallon" How the inevitable rise in the price of gasoline will change our lives for the better. And Steve Hargreaves from CNNMONEY.com, right here.

So let me talk to you first, Christopher Steiner. Do you think that oil prices are going higher? Why?

CHRISTOPHER STEINER, AUTHOR, "$20 PER GALLON:" I do, I think there is three reasons. One is supply. If you talk about the developing world, it's not so much the price that matters in the U.S. if you talk about China and India where we've all heard the cliches about those rising middle classes. And they are largely true. Let's put it this way right now there is a billion people on the earth who live lives like Americans do.

By 2040 there is going to be three billion people so long-term oil prices and demand are going to go up. Secondly, supply. The IEA of Paris, the International Energy Association says we have to find three Saudi Arabia's by 2030 to just keep up with current demand to keep up with future demand we'd have to fine six Saudi Arabia's by 2030 because of the decline rates we see at giant fields in Mexico and Saudi Arabia.

And thirdly the dollar. The dollar has to fall further. We have $14 billion in debt; I'm sorry, $12 trillion in debt right now out there. American debt and the current deficit for this year is $1.4 trillion. The dollar is due to be valued further that means of course that oil will cost more.

ROMANS: And you think that oil is going to be, if you are talking about the dollar and the hedge for dollar, heaping that oil, should be gold. Talking about gold.

VELSHI: Interesting. I mean it's hard to argue those points, Christopher, but Steve Hargreaves actually does from "Money.com." I read an article that you wrote the other day that cites a lot of people saying that's not going to happen. We are not going to see oil at those rates, what is the rational for oil not going up in price?

STEVE HARGREAVES, CNNMONEY.COM: Well there are three things that people point to. One is supply. A lot of new supply has come on. High prices back in 2008 that spurred a lot of investment. Supplies from the Gulf of Mexico, Saudi Arabia, security situations improving in Iraq. Supply is one. Two is efficiency. Consumers have actually responded to those high prices in 2008. People actually have bought smaller cars.

VELSHI: Running out of oil, which one of the things Christopher talks about or decline in supply. A lot of people say that's not actually a precursor for the end the world?

HARGREAVES: Right. Well, some people say that you know, the Stone Age didn't end because we ran out of stones. We'll transition to a new energy source before we actually run out of crude.

ROMANS: You say that U.S. oil demand may have already peaked and you also point out that the economy remains pretty fragile. We saw oil prices come down when the economy went into a tailspin. I mean we are not out of the woods yet on the economy. I mean can the economy -- still a weak economy. You know, can you have $100 oil if you have an economy so weak?

HARGREAVES: Right. People say that the economy just isn't going to recover as fast as some people are saying. Advances we're making in efficiency, and if the economy doesn't take off, at least in 2010 you might see prices at $ 60 or $70 a barrel. VELSHI: Christopher, lets get to that point. One thing, that $4 a gallon gas and $140 a barrel oil did, is it did something that no amount of taxes or fuel efficiency standards in the U.S. was able to do. It drove people away from massive consumption of fuel.

STEINER: It was a tripping point for the American public, clearly. The Americans drove $100 billion less miles in 2008 than they did in 2007. We've never seen a drop like that and it was purely because of the price of gas.

VELSHI: So we are talking about $20 gas, aren't we all just going to be walking everywhere or discovering having solar panels on our heads, and wheels on our feet?

STEINER: Well that figures for a few decades out and you have to realize there is a little hyperbole in there for the title of the book. But I do think long term we're going to see higher oil prices.

ROMANS: I want to ask you both really quickly, you made a point about right now a billion people in this earth live like Americans Christopher and that eventually three billion people live like Americans. Just quickly, can 3 billion people really live like Americans or do Americans have to live a little more energy efficiently?

STEINER: We will live more energy efficiently, but it is going to be slow gains I mean usually we gain about 2 percent in efficiency every year. We don't see 10 or 20 percent gains. So looking 20 years out from now, yes our society will be much more efficient, as it always is. We have to be to mitigate our use of oil.

VELSHI: Steve if we live like New Yorkers it is not a bad example. We can actually -- New Yorkers live more efficiently than most Americans.

ROMANS: Right.

HARGREAVES: They do, a lot depends on technology. You see electric cars take off, you see other things come in, maybe we can. If not, step back.

ROMANS: All right. Steve Hargreaves, CNNMONEY.com, also, Christopher Steiner, the book is "$20 Per Gallon." Thanks so much both of you for joining us.

HARGREAVES: Thank you.

VELSHI: All right. Next we are getting bold, as our guests try to predict the future of your money.

Plus, a surprise prediction you're not going to want to miss.

(COMMERCIAL BREAK)

VELSHI: Well, it's time to make some bold predictions for your money in 2010. Back with us, Chrystia Freeland, managing editor of the "Financial Times," Joanne Lipman, former editor and chief economist Conte Nast Portfolio, and satirist and author Joe Queenan. Your predictions, please, ladies and gentlemen.

ROMANS: Let's start with Joann. Because she has three.

LIPMAN: OK. First of all, the villains of 2010, good-bye bankers, hello health insurance companies, I think our health insurance costs are going way up for all of us consumers. Second, I would say conspicuous consumption makes a comeback.

VELSHI: Wow.

LIPMAN: I think so. Look, Americans in 2010, I think you're going to be tired of restraint. They're going to be itching to use those credit cards again.

VELSHI: That was the shortest lived new concept ever.

ROMANS: Where are they getting the money?

LIPMAN: They're going to uses the credit cards again. Every time there's a frugal period it is followed by a burst of conspicuous consumption. We are really getting ready for that.

ROMANS: We are tacky in America.

LIPMAN: Some of us.

So, and -- and third I think on the heels of the "Time" Magazine naming Ben Bernanke the man the year I think "People" Magazine is probably on its way to naming Tim Geithner sexiest man alive.

ROMANS: Oh! That is a bold prediction.

VELSHI: Chrystia what do you think?

FREELAND: My big prediction is next year is going to be the year of the deficit. We've been talking about spending money, government money, our own household money. Next year is going to be the year that everyone focuses on needing to pay down that debt and on higher taxes.

Second prediction, innovation is going to continue to be in the tech sector. It's going to continue to be the year of all sorts of fun gadgets, and the main stream getting into gadget land. And third prediction, more and more bankers are going to be moving to China, Hong Kong.

VELSHI: Very interesting. More and more bankers speak Chinese now. You're finding senior executives who had training, they speak mandarin or they have done time overseas particularly in China. That is interesting. Joe what do you think?

QUEENAN: We use some of that T.A.R.P. money to get Bin Laden. We bring him back and then 2010, those Democrats do just fine in the mid- term elections. That's what I would like them to do with the T.A.R.P. money, get Bin Laden. My other prediction is Tim Geithner will not be named sexiest man alive and Eagles win the Super Bowl and Donovan McNabb will be the most valuable player and he will ask Rush Limbaugh, "what do you think of me now?"

ROMANS: Wow that is a long prediction.

VELSHI: We were just talking about 2010. My money prediction is I'm going to be in a movie.

ROMANS: Really?

VELSHI: "Boys on the Bus." It comes out in the spring.

ROMANS: Are you going to walk the red carpet?

VELSHI: I hope so. If you're not on vacation that week so you can fill in for me.

ROMANS: He didn't ask me to go, you notice.

VELSHI: What I meant, but it's going to be one way or the other, there are a lot of people who think it's going to be a better year. I like the idea that if you take Joanne's elimination of return of conspicuous consumption so we can spend and combine it with Chrystia's the year of fun gadgetry.

ROMANS: That's what we spend it on.

VELSHI: Spend you money on new ...

ROMANS: But higher taxes.

FREELAND: I think so, too.

ROMANS: I think people with money are going to find ways to start feeling better about things. But I think there are people who don't have money and those people are still going to be deleveraging and figuring out how to fix it.

VELSHI: And we're going to talk a little bit about predictions for real estate and for the price of gold and the price of oil and your stocks through out the show.

ROMANS: And we're going to turn to a professional next, a true professional to predict the future. These people are never wrong. We will explain next.

(COMMERCIAL BREAK)

VELSHI: You might think by this time of the show we predicted everything there is to predict about your money. But we haven't. In fact, we can not leave with out asking our good friend Richard Quest, host of CNN "Quest Means Business." What he thinks 2010 holds for the economy. Richard joins us from a land far, far away, Britain, that is, to make his prediction. I don't really care what he says, but it sounds good when he says it because he is so emphatic about every point he makes. ROMANS: And the accent makes him sound so much smarter. This is our panel still here. They have already given us their forecasts. We are not psychics. Richard is not a psychic. We can only make educated guesses, so we will turn it over to a professional in this manner, Roxanne Usleman the psychic consultant as you can see we have had a little bit of fun with the studio.

Now I want to be clear, Roxanne does not use tarot cards or crystal balls, that is a little bit of TV magic there for you. Roxanne you say you will let the angels guide you. So we have some specific questions for them through you. What do you think will happen in the markets in the year 2010?

ROXANNE USLEMAN, PSYCHIC CONSULTANT: Well, what I have been channeling is that gold looks very good. Silver also looks very good, a very good stock to invest in. Commodities are great. Oil will fluctuate up and down, and then it will literally go through the roof to all-time highs, more than we've ever seen it before.

ROMANS: An oil prediction.

VELSHI: Interestingly enough, Roxanne you've also got a prediction about water. You think there will be big profits in water. Explain this to us.

USLEMAN: Yes, I do. In 2010, it is a very good idea to invest in water because there will be problems connected to water, and anything with advanced techniques to clean the water system is a great idea. Also, food because food prices will go up so that's another stock that will be a good thing to invest in.

VELSHI: All right. Let's take Richard Quest up he is joining us from London. Richard what are you thinking about the future? What are your predictions for 2010 when it comes to people's money and what they should do about it?

RICHARD QUEST, CNN HOST, "QUEST MEANS BUSINESS:" I have two predictions that will happen in 2010. The first is that the g-20 will be proved to be the relatively useless bunch that they have perhaps been until the crises itself came along. Having weathered and come together and have coordination across the 20, they will once again go back to irrelevant.

VELSHI: That's not nice. Because they're going to be meeting in my home country of Canada next year.

QUEST: That may well be the case, but the reality is the g-20 will not manage to continue their policy of coordination with any degree of success as different countries come to different points of the exit strategy, and my second big prediction.

Forget all those doomsayers, that talk about slow growth, I think 2010, the new year of the decade is going to be a better year on growth, on markets, lower unemployment than the experts are saying. When you and I are reviewing next year, we are going to be talking about how things were much better than people thought. ROMANS: Richard is that the angels told you that or is that your own educated assumption?

QUEST: No. It was a bit of indigestion over lunch. No, seriously. We are already starting to see some signs of it. The markets come back, yes. We are also -- a third prediction, a third prediction, we are all going to be paying higher taxes. That is not a prediction in the UK that is a certainty, taxes are going up. Let nobody believe that their neighbor is going to be better whether it's France, Germany, the UK or your good selves in the U.S you are going to pay for this one way or another.

VELSHI: It might be interesting for Americans to look at what's going on in UK with respect to taxes, so that we can have some understanding. Chrystia earlier said that this is going to be the year of talking about debt and that may be the case because of the taxes situation.

FREELAND: To Richard's point earlier though, I think that the comparison actually for the first quarter should look pretty good. I do think it's going to be a very rough year for unemployment, GDP and everything else, but in the short term, people will be relatively optimistic. Because if you recall a year ago first quarter, we were in basically freefall. I do think that we are going to have a relatively good-looking first quarter.

VELSHI: Joe, last word to you.

QUEENAN: I'm waiting for that Motorola stock to move.

ROMANS: We're all going to be back in six months to see how these predictions have done.

VELSHI: We'll check back on Joe's Eagles' prediction.

ROMANS: I'm afraid we are going to hold you to it.

VELSHI: Thank you for joining us for this special edition of YOUR MONEY "2010 Predictions." What ever the New Year holds in store for your money you can be sure we will be on top of it. We hope you join us for the ride.

ROMANS: Yes. You can follow us on facebook and twitter at Christine Romans and at Ali Velshi and make sure you join us every week for YOUR MONEY, it is Saturday's at 1:00 pm Eastern and Sunday's at 3:00 and we are also online 24/7 CNNMONEY.com.